Shares of Hysan Development Company Limited (HKG: 14) are the most popular among private companies which hold 42%, while individual investors hold 33%.

If you want to know who actually controls Hysan Development Company Limited (HKG:14), then you will need to look at the composition of its share register. With 42% of the capital, private companies hold the maximum shares in the company. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

Individual investors, meanwhile, represent 33% of the company’s shareholders.

Let’s dive deeper into each type of owner in Hysan Development, starting with the table below.

Check out our latest analysis for Hysan Development

SEHK: 14 Ownership Breakdown July 22, 2022

What does institutional ownership tell us about the development of Hysan?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors hold a sizeable share of Hysan Development. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Hysan Development’s revenue and historical earnings below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
SEHK: 14 Earnings and Revenue Growth July 22, 2022

We note that hedge funds have no significant investment in Hysan Development. Our data shows that Lee Hysan Estate Co, Ltd is the largest shareholder with 42% of shares outstanding. For context, the second shareholder owns approximately 8.1% of the outstanding shares, followed by a 4.8% ownership by the third shareholder.

After digging a little deeper, we found that the 2 major shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence company decisions.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Insider ownership of Hysan Development

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Hysan Development Company Limited. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. Keep in mind this is a big company and insiders hold HK$91 million worth of shares. The absolute value can be more important than the proportional part. It’s good to see board members owning stock, but it can be helpful to check whether those insiders have bought.

General public property

The general public, including retail investors, owns 33% of the company’s shares and therefore cannot be easily ignored. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Private Company Ownership

It seems that private companies hold 42% of the shares of Hysan Development. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Hysan Development, we need to consider many other factors. Know that Hysan Development shows 1 warning sign in our investment analysis you should know…

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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